On March 6, 2025, U.S. President Donald Trump signed an executive order establishing a strategic bitcoin reserve. Alongside it, the United States will form a "digital asset reserve" that will include some altcoins.
Despite the significant step for the institutional acceptance of cryptocurrencies, the market marked a short-term drawdown, after which it "froze" in anticipation.
From Idea To Result
The idea of creating a national cryptocurrency reserve appeared in the United States a few years ago. The recognition of bitcoin as legal tender in El Salvador in September 2021 was a kind of impetus for this. Soon after, the country's authorities began buying the asset, accumulating it at government-controlled addresses.
As of March 2025, El Salvador's bitcoin reserves total 6,103 BTC, according to Nayibtracker.
The first mentions of the possible use of the asset by the United States appeared back in 2021. For example, Strategy (formerly MicroStrategy) co-founder Michael Saylor spoke about this possibility.
"#Bitcoin is the ideal treasury reserve asset for a family, corporation, government, institution, or trust.," the entrepreneur said at the time.
Similarly, the use of the first cryptocurrency as a reserve asset was mentioned by Perianne Boring, CEO of The Digital Camber, at the time.
That said, the political environment in the U.S. between 2021 and 2024 prevented the idea of such a fund from reaching beyond the cryptocurrency community.
The administration of former President Joseph Biden and former U.S. Securities and Exchange Commission (SEC) head Gary Gensler were skeptical of the digital asset industry. This was largely due to a series of high-profile bankruptcies that caught up with companies in the industry during the "cryptowinter" period.
The rhetoric around bitcoin has changed significantly as the presidential election approaches in 2024. Entrepreneur Donald Trump, running for a second term, has begun to show the industry active support.
The politician promised to create a "digital asset-friendly" economy and make the United States the "crypto capital of the world." Around that time, the idea of forming a strategic bitcoin reserve took shape.
Last July, Trump spoke at the Bitcoin 2024 conference, where he announced that the first cryptocurrency would overtake gold and silver in market capitalization. On that day, the future president announced his intention to retain government-controlled assets. Based on them, he planned to create "the core of a strategic national bitcoin stockpile."
Almost immediately afterward, Senator Cynthia Lummis introduced the BITCOIN Act of 2024. It provided for the Federal Reserve (Fed) to purchase up to 200,000 BTC per year over a five-year period. Crypto-assets could only be sold after 20 years for the sole purpose of paying off the national debt.
After the national debt issue was resolved, it was assumed that the Fed would be able to realize up to 10% of the reserve every two years for any needs.
In January, Trump officially took over the US presidency and began promoting digital asset-friendly figures to public office. He also signed an executive order creating a working group on cryptocurrencies and appointed entrepreneur David Sachs as the so-called "cryptocurrency czar."
Many analysts and members of the media expected the U.S. president to announce the creation of a bitcoin reserve at the upcoming Digital Asset Summit. It will take place at the White House on March 7, 2025.
However, Trump did not wait for the event and already signed an executive order establishing the U.S. Strategic Bitcoin Reserve (SBR) fund on March 6, 2025. The main provisions of the document state:
- the fund is created on the basis of assets previously confiscated in criminal and civil cases;
- bitcoin to the reserve comes exclusively through confiscations and fines - additional purchases are possible only with a separate government decision;
- A "United States Digital Asset Stockpile" is being created to store confiscated altcoins;
- The U.S. Treasury Department is responsible for managing both reserves through specially created offices;
- bitcoins from the strategic reserve may not be sold - they will be treated as the country's reserve assets;
- confiscated digital assets may only be sold to return funds to victims of crime, support law enforcement or fulfill court orders;
- The U.S. Department of the Treasury and the U.S. Department of Commerce are required to develop a safe asset management plan and evaluate whether legislative intervention is necessary;
- all federal agencies must provide complete data on the digital assets in their possession within 30 days for transfer to the strategic reserve and stockpile.
That said, Sachs noted that this is only the first step toward what the fund will ultimately look like.
Expectation vs Reality
The announcement of the creation of the bitcoin reserve caused active discussions in the community. Many expected that the President and his team would be guided by Senator Lummis' bill when writing the text of the document;
It essentially followed the strategy of Strategy and other institutional investors who are purchasing bitcoin in significant volumes for long-term storage. Some speculated that the government would launch purchases worth hundreds of billions of dollars, which could trigger a powerful rate hike.
However, as seen in the final document, it does not include a mechanism to buy bitcoin with public money at launch. This has caused some consternation among the community;
In particular, Nick Ruck, head of LVRG Research, noted that traders were disappointed because the reserve decree was "not as optimistic as they had hoped."
"The announcement was an occasion for 'news selling' as the difference in expectations reduced the perceived amount of buying pressure in the cryptocurrency market," stated Ruck.
Analysts at 10xResearch pointed to a lack of specificity in the document. They said the risk of disappointment with the final fund structure is still high.
"While this is a first step, the details have been far from what many expected. While additional measures may be announced later, recent events underscore the significant gap between the ideal scenario and the actual policy rollout," noted at 10xResearch.
Part of the users also expressed their dissatisfaction with the content of the decree. In their opinion, the lack of mention of specific plans to purchase bitcoin is not at all what the industry expected from the "crypto-president".
According to Sachs, the U.S. government owns approximately 200,000 BTC. A significant amount of these assets was accumulated as part of seizures from two major investigations - the activities of the darknet platform Silk Road and the hacking of the exchange Bitfinex.
That said, Galaxy Digital's head of research Alex Thorne believes that the US authorities can only count on 86,000 BTC at the end of the day. This is due to Bitfinex's right to receive 112,000 BTC stolen from it. He estimates the total amount of assets under the control of the US authorities at 198,000 BTC.
"...market will learn the difference between “seized” & “forfeited”," Thorne wrote.
At the same time, many institutional players and notable industry figures were optimistic about the document's emergence. Michael Saylor claimed that the U.S. now has the largest bitcoin reserve in the world.
Coinbase CEO Brian Armstrong expressed confidence in the G20 countries establishing similar funds soon. He called Trump's decision "incredible."
Bitwise Asset Management Chief Investment Officer Matt Hougan, for his part, emphasized that the US president's executive order drastically reduces the likelihood of bitcoin becoming illegal. In the future, it will be much harder for the U.S. government to "ban bitcoin" if such a desire suddenly arises.
"This accelerates the pace at which other countries are considering strategic crypto reserves as it creates a short-term window for countries to get ahead of potential additional purchases by the U.S.," Hougan also said.
Sygnum Bank representatives in comments to Cointelegraph noted the likelihood of a twenty-fold increase in the price of the asset. In their opinion, this could happen if bitcoin continues to move towards strategic US government funds at both federal and regional levels.
However, for this to happen, the government needs to present a real mechanism to replenish the bitcoin reserve, the company recognized.
The Calm Before The Storm?
As for the market reaction, half an hour after the text of the decree was made public, the bitcoin exchange rate sagged almost 7% - from $91,000 to below $84,700, according to TradingView.
Within a few hours after that the asset regained most of the lost positions and at the moment of publication of the material is trading near $89,430. Weekly growth at this stage is 5.5%.
The market thus failed to show any growth amid news of the creation of a bitcoin reserve, while facing notable volatility.
The altcoin sector also initially experienced a drawdown, but quickly returned to the levels prior to the announcement of Trump's decree. Over the past 24 hours, the average decline in value among the top 10 assets by market capitalization was 2%, according to CoinMarketCap.
As noted earlier, analysts attribute this market behavior to partial disappointment over the lack of government purchases of bitcoin. In addition, they drew attention to concerns about the possible reduction of the fund due to the return of previously confiscated assets. Both Thorne and crypto expert Samson Mouw spoke about this.
A Look Into The Future
To summarize, experts point to both the presence of global benefits from the creation of a bitcoin reserve and the U.S. digital asset stockpile and some risks. To the first can be attributed:
- The possibility of forming a high-yield fund on the basis of the first cryptocurrency;
- positioning of the USA as a leader of the cryptoindustry;
- further legalization of the industry.
Among the risks analysts cite are:
- Bitcoin volatility;
- lack of a clear mechanism for buying cryptocurrency and other details regarding the reserve of digital assets;
- the likelihood of a revision of the industry policy in the event of a change of administration.
The creation of the U.S. strategic bitcoin reserve is a landmark event that confirms the recognition of cryptocurrencies at the state level, many market representatives believe. At the same time, they point to the fact that the lack of an active procurement initiative at this stage raises questions from the community.
According to words of some analysts, the near future may bring more clarity on the structure of the fund. In addition, as mentioned, the White House will host a crypto summit on March 7, where Donald Trump will speak. Part of the community believes that at the event, the president will reveal new details about the strategic bitcoin reserve.
